Business Income / Rental Income for Lessor Risk

[iiinycboi]

Does anyone know the specific terms of these coverages?

Do they provide you income coverage if you can not rent out your place because no one is renting?

Or this coverage only takes effect after a claim and that claim is preventing you to get your business income?



I got a bank guy who tells me my insured MUST have rental protection if he can not lease out his investment property. Im asking him is he talking about rental income / business income . but he said i have to state on binder it must cover non rented premises for the first 6 months.

 

[nyc2phi]

Rental income is business income in this case. The landlord's income is coming from his rent. The business income will only pay in the event of a claim and the building or some units become inhabitable. A strong coverage to have here is business income coverage 12 months acutal loss sustained. If your carriers don't offer this then you will need to talk to the landlord to figure out what his "rent rolls" are for the year. Some people determin the rent rolls by giving them 10% of the property coverage which I don't really recommend.

The bank only needs to see business income coverage on the binder. I've never heard of an insurance company offering to pay a landlord for his inability to rent out a unit, if I am wrong you wont see me on these forums for much longer as I would now be in the property investment game lol.

 

[djs]

I think you are getting lost in the muck, or maybe the banker is.

I'm 'sure' all they want is Loss of Rent coverage, due to a covered loss, not due to a high vacancy rate in town.

Put it on the binder that way if you need to, Loss of Rent (covered loss): 12 months, or whatever the coverage is.

Let the bank figure it out.

Dan

 

[iiinycboi]

yeah i usually put loss of rent or rental income coverage,

but this one specific banker says you must cover rental income if they cant rent it out, just because no one is renting.

like loss of rent is not enough it has to be loss of rent if not leased out in 6 months. (im thinking to myself what insurance company would do that..)

 

[NCAgent]

I think you are getting lost in the muck, or maybe the banker is.

I'm 'sure' all they want is Loss of Rent coverage, due to a covered loss, not due to a high vacancy rate in town.

Put it on the binder that way if you need to, Loss of Rent (covered loss): 12 months, or whatever the coverage is.

Let the bank figure it out.

Dan

Glad I wasn't the only one thinking that.

For what it is worth, I work inside of a mortgage company as their agent. I get requests all the time for binders and dec pages showing loss of rent coverage for 12 months or for x dollars or things like that. They just want to make sure that the loan will keep being paid and the house is in good order. Otherwise they really don't care.